Continental Divide

Aug 01, 2003 9:30 PM  By

Caution, not creativity, has characterized most U.S. companies in the past couple of years. But at a time when risk taking is minimal, marketers are also quietly spreading their wings — overseas. Outsourcing of call center and IT functions to foreign countries is almost commonplace, and the Web has enabled even the smallest companies to sell to customers abroad. As Gary Steszewski, executive vice president of Madeinbuffalo.com (“Storehouse,” p. 10), told us, “Our plan is to eventually go international. Who knows how far we’ll get with this thing? Why not ‘Madeinjakarta’ or ‘Madeinulanbator’? The sky’s the limit.”

The major logistics companies have also been quick to recognize that. UPS, for example, has developed a plethora of international services; last month it launched a distribution program for German footwear manufacturer Birkenstock to ship special orders to the U.S. in days instead of months. But even if your business isn’t in the big leagues yet, you should consider exploring whether a third-party logistics provider may make it viable for you to set up an overseas operation. In the 2003 edition of “Who’s Who in Logistics?” author Richard D. Armstrong notes that growth rates for the $17 billion U.S. 3PL market — which grew 10.5% last year — have been in the double digits since 1995. He points out that 3PLs frequently offer such value-added services as consulting, light manufacturing, home delivery, reverse logistics, and small package fulfillment, both at home and abroad.

Be aware, though, that you may not always know which third party does what. For the uninitiated, Armstrong provides some basic definitions: A 3PL is the value-added logistics provider who contracts to provide the requested services. This entity is not to be confused with an LLP (lead logistics provider), who manages other contractors, or with an LLM (lead logistics manager), who designs, builds, and manages supply chain components. And on no account should you mistake either of these for a 4PL, who is a consultant operating as an LLP or LLM, or as a supply chain integrator.

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